In a six-page letter to the congressional conference-committee charged with combining the House (see April 21, 2005) and Senate (see June 28, 2005) versions of the 2005 Energy Policy Act (HR 6), Energy Secretary Samuel W. Bodman expresses the Bush administration’s strong opposition to a provision that would grant coastal oil-producing states like Louisiana a share of the royalties from offshore oil and gas operations. Historically, the royalties have been paid exclusively to the federal government. [Houma Today, 7/21/2005; Houma Today, 7/23/2005; Salon, 9/1/2005] Bodman writes in his letter that “The administration strongly opposes” the new funding. “These provisions are inconsistent with the president’s 2006 budget and would have a significant impact on the budget deficit.” [Salon, 9/1/2005] The statement also says, “The administration recognizes that coastal Louisiana is an environmental resource of national significance and has worked closely with the state of Louisiana to produce a near-term coastal wetlands restoration plan to guide how the next phase of restoration projects in Louisiana will be identified, prioritized, and sequenced.” [Houma Today, 7/21/2005] Craig Stevens, the press secretary for the Department of Energy, later explains to Salon: “We didn’t object to the idea in principle. [Rather, we objected to] part of the way it was crafted.” [Salon, 9/1/2005] Bodman also takes issue with the House’s WRDA bill (see April 13, 2005). WRDA, or the Water Resources Development Act, provides federal authorization for water resources projects. The House bill would require the federal government to pay 65 percent of the cost of the Louisiana Coastal Area (LCA) restoration project, leaving the remaining 35 percent for state and local governments to pay. “The cost-share paid by the general taxpayer for the Everglades restoration effort is 50 percent, and this should likewise be the maximum federal contribution for the Upper Mississippi River and Illinois Waterway and coastal Louisiana restoration efforts.” If the Fed’s portion of the bill were 65 percent, the letter argues, it would “create expectations for future appropriations that cannot be met given competing spending priorities within the overall need for spending restraint, including deficit reduction.” Adam Sharp, spokesman for Senator Mary Landrieu (D-LA), notes however that the 50-50 cost-share formula for the Everglades is an exception to the Corps’ practice, not the rule. Indeed, in January (see January 2005), the Corps recommended the 65-35 cost share formula in its report on the coastal plan to Congress saying that such a split would be “consistent with existing law and Corps policy.” [Houma Today, 7/21/2005]

the US Army Corps of Engineers submits the final draft of the Louisiana Coastal Area (LCA) Ecosystem Restoration Study to Congress for WRDA authorization. WRDA, or the Water Resources Development Act, provides federal authorization for water resources projects. The Corps recommends that Congress approve a federal-state cost sharing ration of 65 percent federal, 35 percent state. A 65-35 split would be “consistent with existing law and Corps policy,” the Corps says. [Houma Today, 7/21/2005]

The Senate Environment and Public Works Committee approves the Water Resources Development Act (WRDA) of 2005 (S.728), which includes authorization (but not appropriation of funds) for the $1.9 billion Louisiana Coastal Area (LCA) Ecosystem Restoration Study. The federal contribution to the project would be 65 percent, with the State of Louisiana, paying the remainder. “This legislation is a major breakthrough toward ensuring the future of our unique way of life in coastal Louisiana,” Rep. David Vitter, (R-LA), says in a statement. “It is critical for this authorization to be included in WRDA so that Congress can aggressively appropriate federal funds to restore Louisiana’s coast.”
[Advocate (Baton Rouge), 4/17/2005]

The House passes its version of the 2005 Energy Policy Act (HR 6). One provision, secured by Louisiana Congressman Bobby Jindal, (R-Kenner), would provide Louisiana with up to $1 billion in offshore oil and gas royalties every year beginning in 2016. Louisiana and its coastal parishes would use the money to fund coastal wetland restoration efforts. Historically, offshore gas and oil royalties have been paid exclusively to the federal government, since these operations are conducted on federal territory. But Louisiana has long argued that a portion of this money should be used to help fund efforts aimed at restoring Louisiana’s coastal wetlands, the disappearance of which has been partly attributed to Gulf Coast oil and gas operations. A similar provision is included in the Senate version of the bill (see June 28, 2005). [Advocate (Baton Rouge), 4/17/2005]

The Senate passes its version of the 2005 Energy Policy Act (HR 6). Like the House version of the bill (see April 21, 2005), it includes a provision that would divert a portion of offshore oil and gas royalties to coastal energy producing states like Louisiana. But unlike the House version, which would give Louisiana $1 billion in royalties every year beginning in 2016, the Senate version would only provide Louisiana with $540 million over a four-year period beginning in fiscal year 2007. Louisiana would use the money to fund projects aimed at restoring the state’s coastal wetlands. The bill is referred to a conference committee (see July 29, 2005) charged with resolving the differences between the House and Senate versions. [New Orleans CityBusiness, 6/23/2005]

In a letter to President Bush, Louisiana Governor Kathleen Blanco urges the president and his energy secretary, Samuel W. Bodman, to visit the Louisiana coast and see first-hand the deteriorating condition of the state’s coastal wetlands. She wants the administration to reconsider its objection (see July 15, 2004) to a provision in the House (see April 21, 2005) and Senate (see June 28, 2005) versions of the 2005 Energy Policy Act (HR 6) that would channel oil and gas royalties from offshore operations to coastal states for coastal wetland restoration. In her letter, she emphasizes how Louisiana’s disappearing wetlands is making the oil and gas industry’s vast network of pipelines increasingly vulnerable to damage. She also stresses that coastal wetlands have historically protected the coast from the full fury of hurricanes and, without this barrier, a major hurricane could devastate low-elevation coastal communities like New Orleans. “Let me show you the fragile wetlands that are the only protection for the thousands of miles of pipelines that connect this nation to 80 percent of its offshore energy supply and to a full third of all its oil and gas, both foreign and domestic. The vulnerability of those protective wetlands is all the more apparent to our two million coastal zone residents during this active hurricane season.”
[Louisiana, 7/20/2005; Houma Today, 7/21/2005]

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